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Salary Packaging Car

Streamline Your Drive with Salary Packaging Car Options

Maximise your savings and minimise hassle when you choose car salary packaging.

Salary Packaging Car

Are you looking for a way to save money on your car expenses and maximise your take-home pay? Salary packaging a car is a smart and effective strategy that allows you to use pre-tax dollars to pay for your vehicle, resulting in significant tax savings and increased financial flexibility.

Salary Packaging Car | Benefits 

What Is Salary Sacrifice?

At its core, salary packaging car is a form of salary sacrifice. Salary sacrifice refers to the process of redirecting a portion of your pre-tax income to cover specific expenses, such as a car purchase. By doing so, you effectively reduce your taxable income and, consequently, the amount of income tax you pay. This allows you to retain more of your hard-earned money and enjoy greater financial flexibility.

When it comes to salary packaging car, the benefits extend beyond tax savings. By utilising pre-tax dollars to cover your car expenses, you have the opportunity to allocate more of your after-tax income towards other financial goals, such as savings, investments, or debt repayment. This can help you achieve your financial objectives faster and with less financial strain.

Salary Packaging Vs. Other Car Buying Options

When considering purchasing a car, salary packaging car offers distinct advantages over other buying options, such as taking out a car loan. Let’s compare the two approaches to highlight the benefits of salary packaging car:

Salary Packaging Car

Tax Savings: You can reduce your taxable income and lower your income tax payments.

Convenient Budgeting: All car expenses are bundled into one regular payment, simplifying budgeting.

Flexible Options: You have the flexibility to choose a new or used car and can upgrade or extend the lease at the end of the term.

Potential Savings: Salary packaging can result in significant savings over the long term.

Car Loan

No tax benefits: Car loan payments are made with after-tax income.

Multiple payments: You need to manage separate payments for car loan repayments, insurance, registration, and maintenance.

Limited flexibility: You are committed to the car loan term and may face restrictions on upgrading or modifying the vehicle.

Limited savings potential: Car loans typically do not offer the same level of potential savings as salary packaging car.

Salary Packaging & Novated Car Lease

Compared to salary packaging a car, a novated car lease is a popular option within salary packaging car arrangements. It involves a three-way agreement between you, your employer, and a finance provider (typically a leasing company). In a novated lease, your employer takes on the responsibility of making lease payments on your behalf using your pre-tax income, while you enjoy the benefits of driving the vehicle.

The key advantage of a novated car lease is the flexibility it offers. You have the freedom to choose the car you want, whether it’s a brand-new vehicle or a used car. Additionally, at the end of the lease term, you have the option to purchase the car outright by making a residual payment, extend the lease for a new term, or upgrade to a different vehicle.

A novated car lease can also provide significant tax benefits. By using pre-tax income to cover lease payments and other car-related expenses, you effectively reduce your taxable income, resulting in lower income tax payments. This can lead to substantial savings over the lease term.

Ready to unlock the tax benefits and savings of salary packaging car?

Get in touch with our team today to explore your options and start the process.

How Salary Packaging A Car Works

Check with your employer to ensure that salary packaging a car is available as part of your employee benefits package. Different employers may have specific policies and eligibility criteria.

Choose the car that best suits your needs and preferences. Whether you prefer a new or used vehicle, salary packaging car offers flexibility in selecting the right car for you.

The finance provider will arrange the necessary finance for your chosen vehicle. This can include a novated lease, which involves your employer making lease payments on your behalf using your pre-tax income.

Your employer deducts the lease payments and other car-related expenses from your pre-tax salary, reducing your taxable income and resulting in lower income tax payments.

All your car-related expenses, such as insurance, registration, fuel, and maintenance, can be included in your salary packaging arrangement. These expenses are typically bundled into one regular payment deducted directly from your salary.

At the end of the salary packaging term, you have several options. You can choose to purchase the car outright by making a residual payment, extend the lease for a new term, or upgrade to a different vehicle and start a new lease.

Frequently Asked Questions

In addition to lease payments, you can include expenses such as insurance, fuel, maintenance, and registration.

Yes, you have the flexibility to select the car that suits your needs and preferences, whether it’s new or used.

The duration of the arrangement can vary, typically ranging from one to five years. At the end of the term, you can choose to purchase the car, extend the lease, or upgrade to a new vehicle.

Personal use of the car is typically allowed within certain limits. Your employer’s policy will outline any restrictions or guidelines.